How to Choose The Right Bad Credit Personal Loan in NZ


Past financial mishaps have deterred many people with bad credit from attempting to take out a personal loan - but in actuality, borrowers don’t need great credit scores. Many lenders are willing to work with this type of individual, who needs financial help, whether it be to purchase a car, take out a mortgage, or cover for an emergency.

Bad credit doesn’t have to stop New Zealanders from living the dream. Regardless of the negative marks on an individual’s financial record, there are still several viable options to consider.

This guide describes those options, details the steps it will take to apply for them, and demonstrates how to get a loan with bad credit. Keep reading to find out more about how lenders work with borrowers to get bad credit loans with guaranteed approval.

What is a Bad Credit Loan?

Credit is an agreement or promise made by borrowers to pay back money loaned to them from their lenders. This trust agreement specifies that the borrower will repay the amount of the loan over time, typically with interest.

A borrower’s credit score is measured by his or her credit history, and there are many reasons why a score can drop. Individuals with no borrowing history will also have low credit scores, even if they have no derogatory marks.

Bad credit loans exist for people like those listed above. Loans of this nature usually carry high interest rates, which range from 10% to 30%. This type of loan can be either unsecured or secured, meaning the borrower must provide collateral (like a car or piece of property) to back the loan.

The Benefits of Taking Out a Bad Credit Loan

The term “bad credit loans” might sound negative, but there are some benefits to them.

  • Easy approval odds. The chances of getting approved are high, since these lenders specialize in bad credit loans.
  • Help with improving finances. Using a bad credit loan to catch up on finances or consolidate other loans can save borrowers money in the long run.
  • Quick access to cash. Many loans can be funded within hours.

The Risks of Taking Out a Bad Credit Loan

Bad credit loans are beneficial for many borrowers, but they do come with some risks.

  • High interest rates. Bad credit loans are known to cost more, since they come with greater risk for the lender.
  • Possible need for cosigner. Some lenders require borrowers with bad credit to have another individual (usually one with a higher credit score) sign for the loan with them.
  • Other fees. Lenders can add on additional fees to protect themselves while taking on the risk of funding a personal loan for bad credit.

6 of The Best Bad Credit Lenders in New Zealand

There are several great options to consider when it comes to choosing a lender. Here are the six best bad credit lenders in NZ.

1. Nectar

Nectar is a company that provides loans through a digital platform. Its entire loan approval and funding process is done online. New Zealand borrowers can request personal bad credit loans through the organization’s website.

Interest rates and fees: Rates range from 8.95% to 29.95%. There is a one-time fee of $250 for unsecured loans, or $340 for secured loans. Missed or late payments will also incur additional charges. A $30 variation fee is also applied if borrowers change the terms of their loans.

Requirements: Applicants must be 18 years or older, hold a valid NZ driver’s license or passport, have a NZ bank account, make at least $400 per week, and not have any significant unpaid defaults or bankruptcies.

How to apply: Apply for a loan with Nectar in just seven minutes.

2. Instant Finance

Instant Finance has been in business for nearly 50 years. It offers personal bad credit loans for things like life events, necessities for homes or cars, and debt consolidation. It is also a member of the Financial Services Federation, which means it is a responsible, non-bank institution.

Interest rates and fees: Fixed rates for the term of the loan begin at 19.95% and go up to 29.95%. There is a loan establishment fee of between $95 and $495, depending on the amount of the loan. An additional $2.50 fee is applied to each payment installment, and a variation fee of $50 is levied if the loan terms are changed. Early payoff will result in a $125 minimum fee.

Requirements: Borrowers must be at least 18 years old and have a NZ driver’s license or passport to apply. Complete a secure Credit Sense link to process bank statements and verify income. A representative will contact applicants for further information.

How to apply: Apply to Instant Finance online in four steps for bad credit loans with fast approval.

3. Geneva Finance

Geneva Finance is a lending company that provides personal, car, or homeowner loans to New Zealand borrowers. Thanks to its free bulk payments option, borrowers can make multiple payments on the loan (up to the full amount) ahead of schedule without incurring additional fees.

Interest rates and fees: Rates range from 11.95% up to 29.95%. There is a loan establishment fee of between $50 and $695, which is dependent on the loan amount. In addition, borrowers pay a loan administration fee of up to $8 per month. Other charges will depend on the Geneva Finance services the borrower is using.

Requirements: Applications must include residential and employment history, as well as any other financial obligations. Credit history is also a factor.

How to apply: Use Geneva Finance’s quick application to begin the loan process and get an answer in as little as five minutes.

4. AA Money

AA Money has been in the finance business in NZ for more than 100 years. This company offers Kiwis personal loans for consolidation or refinance, life events, home improvement expenses, and other needs. If existing borrowers find themselves experiencing financial hardship, AA Money will work with them to potentially adjust their repayment terms.

Interest rates and fees: Interest rates begin at 7.95% and can be as high as 15.95%. Existing AA members will receive a discount of $60 off of the regular $240 assessed establishment fee. Loan refinancing includes a $150 fee, and late or missed payments will result in additional charges and penalties.

Requirements: New Zealanders who are at least 18 years old and have an annual income of at least $30,000 can apply for a personal loan for bad credit online. A personal asset such as a vehicle or personal property is required as collateral.

How to apply: Begin an application on the AA Money website. Include the desired amount and specify how long the loan term will be.

5. Finance Now

Finance Now has offered personal loans to Kiwis for more than 20 years. SBS Bank, which is based in New Zealand, is its parent company. This organization offers personal loans for bad credit through both secured and unsecured loan options. Borrowers who meet the criteria outlined in the Responsible Lending Code can be quickly approved.

Interest rates and fees: Interest rates range from 12.29% to 29.95%. Fees include a $180 establishment fee, in addition to other third-party charges and a $95 loan variation fee, if applicable.

Requirements: Applicants must have a stable income and own a home, and they cannot have had any recent defaults on loans or payments with other institutions. Those without proven credit experience are required to have a cosigner.

How to apply: Adjust the sliders on the loan financing scale to get an idea of the loan repayment options. Select ‘Apply Now’ to begin a loan application with Finance Now.

6. NZCU South

NZCU South is a New Zealand credit union that has been in business for more than 50 years. This not-for-profit company offers Kiwis personal loans to assist with debt consolidation or personal funding for weddings, vacations, emergencies, or other needs. Loans can be applied for and funded 100% online.

Interest rates and fees: Interest rates begin at 9.9% and go up to 28.90%. There is a $250 approval fee and a $36.51 fee for third-party charges.

Requirements: Applicants must be at least 18 years old, be residents of New Zealand, have satisfactory credit reports or collateral, and must show proof of income.

How to apply: Fill out the NZCU South’s application to begin the process.

What To Know Before Choosing a Bad Credit Loan

Knowing how to get a bad credit loan and which lenders offer this option is only part of the process. Here are some additional things to consider before applying for a bad credit loan.

Is it possible to get urgent loans with no credit check in NZ?

Lenders in NZ will always run some form of credit check. A bad credit score or lack of credit history can lead to higher interest rates and fees.

Are bad credit loans guaranteed approval in NZ?

No. There is no guarantee of an approval for bad credit loans. Many loans require a guarantor to co-sign the loan, or collateral to secure the loan.

What is the easiest loan to get with bad credit?

Because all lenders are different, it is important to research the various options and consult with lenders before determining the best course of action. Each company will offer its own unique pros and cons.

To get a quick idea of what’s out there, apply online at one of the listed companies, like Nectar, and find out in as little as seven minutes what your options are.

How to Choose a Loan with Bad Credit

  • NZ lenders offer Kiwis a wide range of options when it comes to bad credit loans. There are many factors to consider before filling out an application. The first step in choosing the right lender is to do some research and compare the different options.

  • Shop rates and fees from multiple lenders to get the best deal. Ask questions first, and review the borrower qualifications ahead of time.

  • Personal loans for New Zealanders with bad credit are far from impossible to find. There are many options out there that will help Kiwis of all backgrounds to live a fulfilling life.